Settlement Modification (Delphi Settlement)

On December 4, 2007, the Court held a hearing regarding proposed modifications to the terms of the Settlement. At the hearing, the Court heard from Lead Plaintiffs, Lead Counsel (who had conferred with all Lead Plaintiffs) and counsel for Delphi Corporation, who expressed their positions that the proposed modifications were at least neutral to the Class and may, in fact, provide the Class with a net benefit. At the conclusion of the hearing, the Court tentatively approved the terms of the proposed modifications and made the tentative finding that the proposed modifications to the Settlement were at least neutral to the Class and may potentially provide a net benefit to the Class. The terms of the proposed modifications have been agreed to by all parties to the Settlement.

The proposed modifications relate only to the consideration to be provided to the Class by Delphi in the context of its pending Chapter 11 Bankruptcy Proceeding, and do not affect the payments made by any other Settling Defendant. A summary of the proposed modifications to the previously disclosed terms of the Settlement is as follows:

  1. The total cash available for the benefit of the Class is increased by $15,000,000. Delphi will cause this $15,000,000 to be paid directly to the Escrow Agent within ten (10) business days after the Bankruptcy Effective Date.


  2. The Allowed Claim provided to the Class in Delphi's Bankruptcy Case to be paid in Delphi Plan Currency is reduced from $204,000,000 to $179,000,000. Under the current version of the Delphi Plan of Reorganization, Delphi Plan Currency is comprised of stock in reorganized Delphi and the right to purchase additional stock in reorganized Delphi at a discount ("Discount Rights").


  3. Delphi has agreed to finance, at no cost to the Class, the cash payment necessary to exercise some or all of the Discount Rights until after the Effective Date of the Settlement when the Class will have cash available to pay for the additional stock in reorganized Delphi to the extent that any or all of the Discount Rights are exercised. This will permit the Class to realize some or all of the potential value of the Discount Rights without incurring significant additional cost.

    Specifically, Delphi has agreed that Lead Plaintiffs, on behalf of the Class, may elect to exercise some or all of their Discount Rights by delivering to Delphi a notice during the pendency of the exercise period for the Discount Rights Offering stating: (i) that Lead Plaintiffs elect to participate in the Discount Rights Offering, (ii) the number of shares of new common stock in reorganized Delphi that Lead Plaintiffs will purchase through the Discount Rights Offering, and (iii) that Lead Plaintiffs elect to reimburse Delphi, within 10 business days after the Effective Date of the Settlement, the aggregate amount of the Discount Rights Offering exercise price in connection with the number of shares of new common stock in reorganized Delphi purchased on behalf of the Class. No distribution of new common stock in reorganized Delphi available through the Discount Rights Offering or certificates therefor will be made to the Escrow Agent until Delphi has received from Lead Plaintiffs the full amount needed to reimburse Delphi for the aggregate exercise price for such new common stock.

    Lead Plaintiffs, on behalf of the Class, have agreed that, if they exercise any or all of their rights in connection with the Discount Rights Offering pursuant to the preceding paragraph, such exercise is a commitment to purchase the shares so specified. Accordingly, in the event of such exercise, upon the Effective Date of the Settlement, Lead Plaintiffs, on behalf of the Class, shall pledge as collateral (i) cash maintained in the Gross Settlement Fund as a result of payments made pursuant to the Stipulation and interest earned thereon and (ii) if such cash pledged is less than the amount necessary to reimburse Delphi for the full amount of the purchase price for the rights exercised by Lead Plaintiffs in the Discount Rights Offering, the cash proceeds of any sales of any new common stock in reorganized Delphi distributed to the Escrow Agent as part of the Delphi Net Consideration.

Lead Plaintiffs and Lead Counsel support the modifications, and believe that the economic benefit of the additional cash and financing for the Discount Rights provided by Delphi are at least equivalent to the reduction in the Allowed Claim in Delphi's Bankruptcy Case. Lead Plaintiffs believe that Delphi's proposed modification to provide the financing mechanism is a benefit to the Class because it permits the Class to obtain some or all the benefit of the Discount Rights Offering at no additional cost.

You may object to the proposed modifications to the Settlement terms, but only to these modifications. To do so, you must send a letter stating that you are a Class Member, that you object to the proposed modifications to the terms of the Settlement in In re Delphi Securities, Derivative and ERISA Litigation, MDL No. 1725, Case No. 05-md-1725, and the reasons why you object. In your objection, you must include your name, address, telephone number, and your signature. You must also include information concerning your transactions in Delphi Securities during the Class Period, including the dates, prices paid or received and amounts purchased, acquired or sold and held at the end of the Class Period, so that the Court may determine that you are part of the Class and have an economic interest in the Settlement.

Any objection to the proposed modifications to the Settlement terms must be filed with the Court by January 3, 2008, and received no later than the close of business on January 3, 2008 by counsel listed below:

Co-Lead Counsel for Plaintiffs:

Bradley E. Beckworth, Esq.
Nix, Patterson & Roach, LLP
205 Linda Drive
Daingerfield, Texas 75638

Jeffrey N. Leibell, Esq.
Bernstein Litowitz Berger & Grossmann LLP
1285 Avenue of the Americas
New York, New York 10019

Sean Handler, Esq.
Schiffrin Barroway Topaz & Kessler, LLP
280 King of Prussia Road
Radnor, PA 19087

Stuart Grant, Esq.
James J. Sabella, Esq.
Grant & Eisenhoffer P.A.
485 Lexington Avenue, 29th Floor
New York, New York 10017

Counsel for Settling Defendants

Stuart J. Baskin, Esq.
Brian H. Polovoy, Esq.
Shearman & Sterling LLP
599 Lexington Ave.
New York, NY 10022-6069

Andrew W. Stern, Esq.
Sidley & Austin LLP
787 Seventh Ave
New York, NY 10019

Thomas W. Cranmer, Esq.
Matthew P. Allen, Esq.
Miller, Canfield, Paddock and Stone, PLC
150 W. Jefferson, Suite 2500
Detroit, MI 48226